Bankruptcy is a way for people or businesses who owe more money than they can pay right now (a "debtor") to either work out a plan to repay the money over time under Chapter 11, 12 or 13, or for most of the bills to be wiped out ("discharged"), as in a Chapter 7 case. 

Often debts are partially resolved through a supervised repayment plan. This supervised repayment plan also allows the interests of all creditors to be treated with some measure of equality. While the debtor is either working out the plan or the trustee is gathering the available assets to sell, the Bankruptcy Code provides that creditors must stop all collection efforts against the debtor.

In most cases, debtors are pleasantly surprised to find that they can keep all or most of the property they own, while obtaining the debt relief they deserve.